Pressured by Feds, Kansas Ends ATM Limit on Welfare Cash

Kansas has dropped its limit on the amount of cash assistance welfare recipients can withdraw from an ATM after federal officials said that policy conflicted with federal law.

The Legislature passed numerous welfare reforms in April, including a $25 limit on the amount of cash that beneficiaries of Temporary Assistance for Needy Families could withdraw from an ATM at one time.

The Kansas Department for Children and Families announced it would rescind the limit after officials from the U.S. Department of Health and Human Services indicated in an e-mail Monday that the provision "would seem to prevent a needy TANF family from having 'adequate access to their cash assistance.' "

The Eagle and McClatchy Newspapers first reported in May that the policy could put the state at odds with a provision in the Social Security Act that requires states to ensure TANF beneficiaries have adequate access to their cash assistance with minimal fees.

The state receives more than $100 million in aid for TANF, and the policy could have put that aid at risk.

The Legislature passed a second bill to empower DCF Secretary Phyllis Gilmore to raise or eliminate the cap to ensure the state complies with federal law. But the state included the limit when it published new welfare regulations last week.

Theresa Freed, the agency spokeswoman, said at the time that the bill only empowered the secretary to change the cap with " 'guidance' from the federal government."

Freed said then that federal officials had asked the agency questions but had not instructed it to lift the cap.

Copies of e-mails obtained by the Associated Press through an open-records request show U.S. officials had questions weeks ago about how the limit would affect poor families.

Sen. Michael O'Donnell, R-Wichita, who carried both bills, on Monday questioned Freed's comments and said the second bill was intended to allow the DCF to raise the cap unilaterally.

The agency lifted the cap within a day. But Freed maintained that the agency had made no reversal. She said it interpreted the federal e-mail as its guidance and acted in accordance.

The comment was included with a list of questions, but Freed said it was "a statement and not a question," which gave the DCF the power to act, unlike previous communications.

O'Donnell said he had been pressing the agency to act. "It was important to a number of legislators just to make sure we were in compliance with HHS," he said Tuesday.

The copies of e-mails between Kansas and regional HHS officials obtained through the records request showed the HHS officials had questions about the ATM policy within days of Gov. Sam Brownback signing the first welfare legislation.

A state official sent an e-mail on April 23 to regional HHS officials replying to questions "about access to benefits for payment of rent." A regional HHS official's May 7 e-mail asked what Kansas would do to ensure poor families had enough places at which to withdraw benefits "with minimal fees or charges," expressing concern about a potential dearth of rural locations.

Rep. Jim Ward, D-Wichita, a member of the conference committee that handled the second bill, said lawmakers specifically asked DCF officials whether the bill's language gave them the authority to raise the limit and were told it did.

He credited the reversal to media attention.

"It's just another example where you have to force the (Gov. Sam) Brownback administration to do the right thing," Ward said. "We're talking about poor children getting food and clothing, that's the money we're talking about here."

O'Donnell said some lawmakers would still like to see a restriction on the amount that can be withdrawn at one time but added that the $25 limit "makes absolutely no sense."

He said he regrets voting for the $25 limit when it was brought as a floor amendment by Sen. Caryn Tyson, R-Parker, during a six-hour welfare reform debate in April.

As recently as Monday, Tyson defended the policy. "This alleviated a problem situation where they're in a vendor that they probably shouldn't be ... and to help curb impulse buying," she said.

Tyson could not be reached for comment Tuesday evening.

The bill included a provision to restrict TANF recipients from using their benefits money for a long list of items, including alcohol, cigarettes, concert tickets, psychics, theme park tickets or cruises.

Gilmore said in a new release Tuesday that although "there is no ATM withdrawal limit in place, we encourage clients to use their assistance for necessities as they work toward self-sufficiency, through our employment services programs."

Sen. Oletha Faust-Goudeau, D-Wichita, an outspoken critic of the legislation, said that after people qualify for benefits money, it should be theirs to spend freely.

Otherwise, she said, lawmakers should subject themselves to the same restrictions for the money they receive from the state. "What's good for the goose is good for the gander," she said.

Wisconsin just got approval to implement the new rule, and it will take effect in two other states in January. Meanwhile, more than 8,000 people have lost health insurance in Arkansas -- many who may comply with the rule but not know about it.